Universal Basic Income (UBI) is an economic policy model that provides a regular amount of cash to all members of a society, without any conditions or work requirements.

The idea of ​​an ETG is not a new one. Thinkers like Thomas Paine proposed similar ideas in the 18th century, but it has regained popularity today due to technological advances, automation, job insecurity and income inequality .

There are four key features that distinguish ETG from other social assistance programs:

Universality : ETG is given to all members of society, regardless of income, social status, education level or other demographic characteristics. There is no distinction between rich and poor, everyone receives the same amount.

No strings attached : Recipients are not required to meet any conditions, such as seeking employment, receiving education, or performing community service, in order to receive payment.

Regularity : Payments are generally made monthly and are ongoing. They are not one-time or emergency aid.

Cash payment : Assistance is in the form of direct cash or a payment deposited into a bank account. Access to specific services such as food stamps or housing assistance is not limited, and individuals have the freedom to spend the money as they wish.

Historical development of ETG

The roots of the ETG idea date back to the Age of Enlightenment. In the 18th century, Thomas Paine argued that landowners should pay a form of rent to society in exchange for the use of natural resources, which should then be distributed to citizens.

In the 20th century, the idea was supported by liberal economists such as Milton Friedman in the form of a “negative income tax,” and by social rights advocates such as Martin Luther King Jr. as a means of combating poverty .

Potential benefits of ETG

Let's now examine in more detail the potential benefits claimed by ETG advocates:

Poverty reduction : ETG aims to reduce absolute poverty by providing a minimum income guarantee for all citizens. For example, an ETG trial in the Indian state of Madhya Pradesh saw significant improvements in participants’ nutrition, health, and housing conditions.

Economic security : A steady and reliable income stream makes people more resilient to economic shocks. Emergency cash payments implemented in many countries during the coronavirus pandemic have shown the importance of such safety nets in times of crisis.

Labor market freedom : ETG can give people the freedom to refuse low-paid, dangerous or unfulfilling jobs. This can encourage employers to improve working conditions and increase wages.

Recognition of unpaid labor : Work that is usually done by women, such as childcare, eldercare, and housework, is economically recognized and valued.

Entrepreneurship and innovation : People who are not worried about meeting their basic needs may take more risks to start new businesses, continue their education, or spend time on creative projects. In the ETG trial in Finland, participants showed increased entrepreneurial activity.

Improved health and education outcomes : ETG trials in Kenya and Namibia have shown increased school attendance and improved access to healthcare among participants.

Reducing bureaucracy : Many existing welfare systems involve complex eligibility criteria and application processes. ETG can reduce administrative costs by simplifying these systems.